As several economies across the world are eyeing the much-anticipated move from physical to digital with the implementation of digital fiat currencies, China has introduced its digital fiat currency, namely ‘e-CNY’ or the ‘e-RMB’, in the domestic futures market. According to China News Service, the Dalian Commodity Exchange (DCE) has used e-CNY for the payment of storage fees to a delivery warehouse, assisted by the local branches of Bank of Communications and Bank of China. This comes amid China cracking down on cryptocurrency mining and crypto within its borders, as blockchain-based currencies are decentralised by definition.
What is China’s digital fiat currency?
The e-CNY, or digital yuan, is a centralized, cash-like digital currency that is expected to be primarily used for retail payments in China. The People’s Bank of China (PBOC), the central bank, and e-CNY operating institutions have conducted large scale e-CNY pilot programs in multiple cities. According to Deutsche Bank research, China’s push for the digital Yuan is to compete with the blockchain technology currencies such as Bitcoin, as well as other central banks’ digital currencies (CBDC).
China News Service has stated that China has launched e-CNY pilots in several cities since the end of 2019, which was joined by Dalian in November 2020. As of June 30 this year, e-CNY has been applied in over a million cases, covering utility payments, catering, transportation, shopping, and government services.
